Price action is better than Indicators

I see some pro traders are talking about price actions. and some traders are using indicators. Some are saying Price Action is the key for success. some are saying indicators are the key.

what is price action?

Technical analysis and reading of past prices. analysis of past prices higher highs,higher lows,swing highs,swing lows,support and resistance, over bought and sold,candle patterns and drawing of trend lines. what words says they are all very same. After that all analyze traders can get some conformation for future actions of price. But what hard work done, it is not guaranteed because future is very unpredictable. ( this is very short explanation of pa, it is big topic )

What is indicators?

It is tool of same work. coded equipments based on past price movements. only for get some conformations of future price. also very unpredictable.

what is different of this two ? , it is like some one use calculator for calculate, some one use mind or drawing for calculate(because they are graduate for that). It doesn’t matter if answer is same.

Finally i can say, both systems giving conformations based on same past price movements. But you have to get knowledge about price action to use indicators for what to use them. After use indicators sometimes with knowledge you not want it any more for conformations. Then you can trade from mind or drawing using price movements. That time you can say you are a pro trader.

#1 Price action is better than indicators

Price action traders claim that it is a much better trading method in general. But if you dig a little deeper, price action and indicators are not that different. Candlesticks or bar charts are tools to visualize price information on your charts. Indicators take the same price information and apply a formula to it. Indicators don’t add or take away anything from the price information you see in your candlesticks – they just process the information in a different way. This will become more apparent in the next points.

#2 Indicators are lagging – price action is leading

A trader who claims that indicators are lagging hasn’t understood their true meaning and purpose. An indicator takes past price action (the amount is defined by the indicator setting) and then visualizes the result after applying a formula to it. Thus, what your indicator shows you is a result of past price action.

However, a trader who analyzes pure price patterns does the same thing; if you are looking at a Head and Shoulders or a Cup and Handle pattern, for example, you are also looking at past price action and price has already moved away from the potential entry point.

As you can see, both use past price information and are, thus, ‘lagging,’ if you want to call it that. To overcome the lagging component, you would have to set your indicator to a shorter time setting or only use a handful of past candlesticks to make your analysis. However, the analysis becomes less and less significant the fewer information you include.

#3 Price action is simple and better for beginners

Is it? In trading, it’s rarely true that one thing is better than the other and it usually comes down to how you use your tool. It’s like saying that a hammer is better than a screwdriver; both tools work very well if you understand when and how to use them, but neither will help you if you don’t know what to do with it.

Without experience or proper guidance, it’s very easy to feel lost as a beginner price action trader. Trading candlesticks are not as easy as it sounds and lots of components often get overlooked, such as the size of candlesticks, how they compare to previous price action and the component of momentum and volatility in wicks and bodies. Don’t make the mistake of choosing price action because it looks simple; a trader who doesn’t understand the nuances of price action trading can easily interpret charts in the wrong way.

#4 “Naked trading” is better because indicator charts are messy

This is an extension of the previous point. The old argument that indicator charts are messy does not hold up. Of course, if you apply five oscillators and ten moving averages to a chart, you can quickly clutter up your screen, but that’s not how indicator trading works. When it comes to indicator trading, traders usually pick one oscillator to analyze momentum and another indicator for chart studies; a good combination is the Stochastic (which is a momentum based oscillator)and the Bollinger Bands (which is a volatility and momentum based chart study tool with a moving average).

Indicators can provide guidance and help traders make objective trading decisions. There is very little room for subjectivity when it comes to analyzing an indicator. On the other hand, price action traders who look at blank charts can easily feel lost, lacking the clear reference points or tools to help them make trading decisions, resulting in acting emotionally or impulsively. It’s also possible for price action traders to create too much noise on their charts by using too many support/resistance lines, trend lines and candlestick components.

As always, such an argument does not hold up when we take a closer look. Whereas some traders feel more comfortable using indicators to take away some of the subjectivity, others prefer price action analysis.

Messy indicators vs. clean price action? It’s not a valid argument, and it’s up to the trader.

#5 Price action is the real way of trading

The final argument is that “professionals” don’t use indicators. Again, it is very hard to validate such a claim, and it all comes down to personal preferences. Indicators can save time, and they only look at very specific aspects of a chart – momentum indicators solely focus on analyzing momentum – to help traders process data faster and without much subjectivity.

In our opinion, it is important to approach this topic with an open mind and not get too carried away. It is important that a trader chooses his trading tools wisely and that he understands the pros and cons of the different approaches. There is no better or worse when it comes to price action vs. indicator trading. It all comes down to how the trader utilizes his trading tools to make trading decisions.

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Your email address will not be published. Required fields are marked *

Comment

Name *

Email *

Website

Learn Forex Trading

1st Time that NO other Forex Trainers or Traders have shown the REAL Account. You can check the LIVE-REAL STATEMENTS before you join the course. The Course is specially for Forex beginners & also for experienced Forex Traders who has crashed there accounts and want to recover it. No Indicators used, it's purely Price Action Course.

Share WithLike WithAbout Arvind My name is Arvind, I trade since 11 years. What I’ve learned over this time is that it is possible to make money in the markets, but in the beginning it was bloody hard… I live in Chennai,…

LEGAL : This website, presented by learnforextrading.in, the lessons and articles it distributes and the blogs it publishes make no recommendations about what Commodity , Equity Future,Forex or Currency to buy or sell. All information is strictly educational and/or opinion. learnforextrading.in does not provide financial, legal or trading advice and is not soliciting the buying or selling of Commodity ,Equity or Currency. The user acknowledges that learnforextrading.in is in no way responsible for the investment and trading and/or legal decisions of its users. The user acknowledges and accepts that learnforextrading.in assumes no responsibility for inaccurate, erroneous or unavailable data. The user is encouraged to conduct its own due diligence. Any tips or trade setups represented are simply learnforextrading.in opinion and meant to pass on information about the Commodity, Equity,Forex or Currency markets and do not constitute financial or trading advice. By using the information, you acknowledge that learnforextrading.in is not providing financial or trading advice and agree that learnforextrading.in is in no way responsible for your trading and investment decisions, regardless of whether those decisions were inspired by using this site and/or its news letters or not.

Disclaimer : Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by learnforextrading.in, its employees, directors or fellow members.Commodities, Equity Futures, options, Forex and currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Equity futures , Commodity Forex and Currency markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell Equity futures, Commodities, Currency or options or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

HIGH RISK WARNING : Commodities. Equity Futures, Forex,Currency and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in Commodities, Equity futures, Forex ,Currency and options and be willing to accept them in order to trade in these markets. Commodity, Equity Forex and Currency trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.